In Allstate Insurance Co. v. Tarrant, 363 S.W.3d 508 (Tenn. 2012), the Supreme Court of Tennessee held that a change made to an insured's policy of insurance by his insurance agent was not subject to ratification by the insured because the insurance agent was not acting in the insured's stead or for his benefit when it made the change and that the insurance company was estopped from denying coverage.
The relevant facts in Tarrant are as follows: On June 17, 2005, Charles Leatherwood was allegedly injured when the motorcycle he was driving collided with a van driven by Diana Lynn Tarrant. Mr. Leatherwood subsequently filed a lawsuit against Diana and John Tarrant, alleging that the accident was caused by Mrs. Tarrant's negligence.
After the negligence lawsuit was filed against the Tarrants, a dispute arose between the Tarrants and Allstate Insurance Company ("Allstate"), their vehicle insurer, as to the amount of liability insurance coverage that was available on the van. Allstate's position was that the van was covered under a personal policy with liability limits of $100,000 person and $300,000 per accident. Meanwhile, the Tarrants maintained that the van was covered under a commercial policy with liability limits of $500,000.
In October 2008, Allstate filed a declaratory judgment action seeking a ruling that the van was covered...
